VietNamNet Bridge – The HCM City Securities Company has said that the current value of Mobifone, one of the three largest mobile networks in Vietnam, may reach $3.4 billion and possibly more than $4 billion if its revenue and profits continue to rise after its split from VNPT.

Mobifone split from the Vietnam Post and Telecommunications Group (VNPT) on June 10. It is now under the direct management of the the Ministry of Information and Communication.

In a recent market newsletter, the HCM City Securities Corporation (HSC) published its estimates of the present value of Mobifone.

In 2009, at the time of economic difficulties, Credit Suisse evaluated Mobifone at about $2 billion.

According to the HSC, this network is valued at more than $3.4 billion. Last year, Mobifone earned VND41 trillion of revenue and more than VND6 trillion (approximately $285.7 million) of profits. HSC’s assessment is 12 times more than Mobifone’s 2013 profit.

"If the revenue and profit of Mobifone continues to rise, the value of this firm can be up to more than $4 billion after the IPO (initial public offering)," HSC said. This is based on the fact that the value of most state-owned companies increases strongly after equitization.

In fact, the valuation of Mobifone has been mentioned several times since 2006 when the idea of equitizing the telecom business was raised. In January 2009, Credit Suisse – the consulting unit for Mobifone’s equitization - evaluated it at $2 billion. According to the HSC, this figure is no longer accurate.

The $2 billion number was set by Credit Suisse in the context of economic difficulties in the world and in Vietnam. An official of Mobifone said at that time that in normal conditions, the value of Mobifone would be worth at least $3 billion. Its revenue in 2008 reached VND17.5 trillion and its net profit stood at VND5.8 trillion.

The HCM City Securities Company also said that Mobifone’s breakup with VNPT, without having to bear losses or loss-incurring subsidiaries,will help speed up its equitization. It is expected that this firm’s IPO will be completed in 2016-2017.

Previously, VNPT had proposed that after separation from VNPT, Mobifone would have to take care of 62 subsidiaries and the two loss-making Vinasat satellites. But the proposal was not adopted. However, Mobifone still has to bear VND1.6 trillion of debt from VNPT after the breakup.

In 2013, the telecommunications market was estimated at $9.9 billion. According to the White Paper on Information Technology and Communications of Vietnam, 81% of the market belonged to three giant networks, Viettel (40.5%), Mobifone (21.4%) and Vinaphone (19.88%).

Before the breakup, both Mobifone and Vinaphone belonged to VNPT.

Na Son